• Net Sales Growth: Increased by 6%, with 7% organic growth.

• EBITA: Rose by 25%, reaching a margin of 13.4%.

• Organic Growth: Total organic growth for the quarter was 7.2%.

• Cash Flow: Operating cash flow remains robust, with free cash flow post-tax of SEK776 million.

• Debt Reduction: Reduced rolling 12-month debt by SEK161 million.

• Acquisitions: Nytida acquired Sorbus, adding SEK22 million in annual net sales, and another acquisition post-quarter added SEK180 million.

• EBITA Margin Improvement: Increased by 2 percentage points compared to the same quarter last year.

• Occupancy and Service Optimization: Contributed to EBITA margin improvement.

• Share Buyback Program: Concluded the second program of the year, spending SEK431 million.

• Leverage: Net debt to EBITDA ratio at 2.2 times, below the target of 3.25 times.

• Warning! GuruFocus has detected 7 Warning Signs with FRA:6MA.

Release Date: November 06, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Ambea AB (FRA:6MA) reported a 6% increase in net sales, driven by 7% organic growth across its divisions.

• Group EBITA rose by 25%, reaching a margin of 13.4%, a significant improvement compared to the previous year.

• The company achieved strong cash flow, allowing for the conclusion of its second share buyback program and further acquisitions.

• Ambea AB (FRA:6MA) continues to expand its service offerings, with new care facilities and acquisitions contributing to growth.

• The company maintains a strong market position in Sweden, Norway, and Denmark, with stable margins despite political shifts and economic challenges.

Negative Points

• Ambea AB (FRA:6MA) faces political and regulatory risks due to its operation in a tax-financed environment.

• The demand for individual and family care services is volatile, impacting occupancy rates in some segments.

• Altiden and Klara experienced negative growth, affecting overall performance.

• The company has lost a contract in Vardaga that will expire in 2025, which could impact future profitability.

• There is uncertainty regarding the sustainability of high margins in Norway due to the volatile nature of demand for child and youth care services.

Q & A Highlights

Q: Can you provide insights on the demand for child and youth care services at Stendi and expectations for 2025? A: Mark Jensen, CEO: Childcare demand is inherently volatile, but we've seen strong demand this year, which we expect to continue into the last quarter. However, predicting mid to long-term demand remains challenging due to its volatile nature.